Description: There's been a fussion of big government and big business, says Klein.

Question: Are markets taking on traditional government functions?

Transcript: I think it’s more complicated than simply that markets are usurping the role of government. I think what we’re seeing is a merger between big government and big business. And I think that’s part of the reason why it’s a little bit hard for people to understand because they know corporations have a great deal of power. But at the same time states seem more important, right? We’re seeing more active military intervention, more intervention in our lives in the form of surveillance. And so we’re seeing very active states, and we’re seeing big spending states – what used to be called military Keynesianism – and certainly a willingness to spend a huge amount of money, to take very bold policy measures. But I would argue in the interest of multi-nationals, not in the interest of people, and that’s the pattern that recurs. So it isn’t . . . It isn’t that states aren’t important. They’re crucial to this process. But the question is in whose interests are those states working? So it isn’t about the end of the nation state or the end of the government. It’s about this very dangerous merger between big government and big business.

Question: What is “corporatism”?

Transcript: I call the model that we’re living in “corporatism”, because I think it accurately describes it. Another phrase is “crony capitalism”. If we hear that phrase in reference to Russia or Indonesia, we understand what that means. You have a powerful, strong-armed government that uses their power to prop up members of their family, prop up the people who fund their political campaigns. It’s a trading of favors. I think it’s actually a pretty good description of what’s going on in the United States as well of the Bush era. Part of the problem is we don’t recognize it as a system in this country. There’s a tremendous resistance to that. So the whole debate is within the language of exceptions. This is one corruption case. This is one contractor scandal, whether you’re talking about Halliburton, or Blackwater, or Parsons. So you know if you think about what we actually read in our newspapers, it’s an endless parade of corruption scandals. But each one is individualized. You don’t take the extra step to say, “This is an economic model. This is how politicians fund their power base and this is the payback.” You know it’s a two . . . It’s an ATM machine in the sense that politicians or contractors withdraw their budgets from government in the form of these huge contracts, and they pay . . . They deposit . . . They pay back not in the form of reliable work, but in the form of campaign contributions. So it is a very effective model. It’s a very self-serving model. It’s not effective to the public, but for the players themselves it’s tremendously profitable both politically and economically. So I think that that’s what . . . that’s what we’re living. And I think the first stage is to identify it as a system and then figure out how you change it. You know it’s pretty basic what needs to happen. I mean there needs to be a real separation between the business of government and the world of business. And the first phase, I think, is real campaign finance reform. And this amazing . . . I think Americans have gotten used to this idea that political campaigns are so expensive that the first phase of even reporting on the campaign is . . . They’re now reported on as if they are themselves corporations. They have third quarter earnings, third quarter profits. You know and if Hilary has more money than Obama, then obviously she will win. So even the way we talk about political campaigns resembles the way we talk about corporations. So I think politics has to be way cheaper. That’s one phase. So then you’re talking about media all of a sudden too, because the relationship with the public airways and the corporatist deal that was made in handing over the public airways to private corporations was a lousy deal for the public because there should have been more negotiated in return for those licenses, like access to those airwaves for free during political campaigns so that politicians don’t have to raise so much money in order to run for office. So then you have this discounted politics, and I think that that’s the first phase of separating these worlds.

But in terms of what you are asking about – in terms of examples of this – there is this very fast moving revolving door and I think people realize that. In the Bush era it’s gotten pretty dramatic in that people don’t . . . Usually the way it works is politicians stay in office through their term. And then when the . . . when the Democrats . . . when the Republicans go to the private sector and cash in on their contacts, that’s the way it works. The Bush era has been different in the sense that people don’t even stay through their term. I mean they’re holding posts for very short periods; not even waiting for a change in administration before cashing in on those contracts. And that high turnover, particularly in the departments that issue . . . that . . . that are the prime ATM machines – like the Department of Homeland Security – one of the biggest problems they have is this extraordinarily high rate of turnover; and their inability to hold on to experienced staff because they immediately, as soon as they get those contracts, go into the private sector and then apply for the same contracts that they used to hand out. So you know that’s part of it – the speed of that revolving door. But I would argue that much more dramatic in terms of what the Bush administration has done is really take out the door and put in an archway. And in many cases there really isn’t . . . you have . . . you have politicians who never really got out of the private sector, and Cheney is the obvious example. He never . . . He went from Halliburton directly to Vice Presidency, but he never sold his Halliburton shares. So all this time that Halliburton has profited tremendously from the war in Iraq, tremendously from high oil prices, Cheney has personally been profiting and he will cash out when he’s out of office. Rumsfeld is another (34:00) example. He refused to sell his shares in Gilead Sciences. He used to chair the Board of Gilead Sciences, which is a pharmaceutical company that owns the exclusive patent on Tamiflu, which is the treatment for the avian flu. So his economic fortunes improved dramatically while he was Secretary of Defense because he wouldn’t sell those shares, wouldn’t sell those stocks. And while he was Secretary of Defense, there were many avian flu scares. Both the Pentagon . . . the Pentagon and the . . . I forget which department. Well the U.S. government bought a great deal of Tamiflu as did governments around the world – stockpiling in case of a pandemic. So the price of this stock went from $18 I think to $83 while he was in office. So there is no revolving door there. There’s just profiting from the very policies that you’re advancing.

Recorded on: 11/29/07